QuickBooks Construction Tip: Always Use a Job!

QuickBooks can be a great tool for efficiently managing your construction company while gaining control over job costs.  Here are tips on setting up your books properly:

General contractors, subcontractors, and those in specialty trades should always use customer and job names in QuickBooks.  Each contract is set up as a separate job.  For example, one contract to repair a kitchen and renovate a bathroom is setup as one job in QuickBooks (with sub-jobs, as necessary,  for each project).  On the other hand, two separate contracts for a kitchen and bathroom renovation are setup as two jobs in QuickBooks.

What happens to overhead costs or other expenses that may not apply to a specific job?  There are two options:

1. Assign these costs to a job called “Overhead” or use a journal entry to allocate overhead items to the underlying jobs they cover.  For example, utilities for a satellite office in Orlando, could be posted to all jobs in that geographic area via a journal entry.
2. Split the detail when posting a single transaction (e.g. check, bill or invoice) so it applies to multiple jobs.

Remember, all transactions must have a job specified, even if the “Overhead” job is used.   Following this important rule will allow QuickBooks reports to run correctly, including the important “Profit & Loss by Job” and “Profit & Loss – Standard/Detail” reports.

Consider using the Contractor Accounting Edition of QuickBooks Premier.  It will display a warning message if any transaction is posted without a customer/job name.